Article excerpt

If China and America are to maintain cooperation, both need to
manage China's rise effectively. The oil arena is an important place
to start.

From Washington to Bejing to Paris, leaders are asking a defining
question of our times: Are China and the United States more likely
to cooperate or to become serious rivals?

A lot hangs in the balance - including the ability to deal with
global financial crises; America's massive debt; global energy
security; climate change; nuclear proliferation and rogue countries,
such as North Korea.

China has revived itself as an economic powerhouse and a world
power. The CIA's World Factbook forecasts that by the middle of this
century China's economy will surpass that of the US in size, though
China's per capita income will remain lower. Of course, as China
continues to grow it will compete with the US on multiple levels,
including strategic control of oil in the Middle East.

Deng Xiaoping, the famous political leader, launched China's Open
Door policy in 1978 to open China to the world, partly in order to
catch up with Western economies.

But China's economic success has also dramatically increased its
oil demand. If current trends continue, China will rely on the
Persian Gulf for one-third or more of its oil by 2025. This
realization has pushed China to refashion its approach toward that
region.

Over the past 25 years, China has significantly expanded its
political relations, economic trade, and arms transfers to countries
in the Middle East, and especially to Saudi Arabia and Iran. But, to
America's chagrin, that means China's oil and gas interests in Iran
have made it reluctant to take a serious stand against Iran's
nuclear aspirations.

Also, in the past, China had no military capability in or near
the Gulf. Now, it aims to project naval power well beyond its coast,
not just to the shipping lanes of the Pacific but also to the Middle
East. Beijing calls this new approach: "far sea defense."

China has been building naval forces to serve its new strategy -
warships that can project its national power. Over the past few
years, it has also built a port at Gwadar, Pakistan, which is
largely commercial but may become a strategic foothold near the
Gulf. In late March 2010, two Chinese warships docked in the United
Arab Emirates - the first time the modern Chinese Navy made a port
visit in the Middle East. …